MCU Industry Overview
MCU, or microcontroller, also known as micro control unit or microcontroller, is a chip-level computer formed by appropriately reducing the frequency and specifications of a microprocessor and integrating memory, flash memory, counter, A/D converter, serial port, etc. into a single chip.
According to the classification of the number of data bits processed, it can be divided into 4-bit, 8-bit, 16-bit, 32-bit and 64-bit; according to the instruction structure, it can be divided into CISC (Complex Instruction Set Computer) and RISC (Refined Instruction Set Computer); according to the memory architecture, it can be divided into Harvard architecture and von Neumann architecture; according to the usage, it can be divided into general-purpose microcontrollers and special-purpose microcontrollers.
MCU was pioneered by Intel and has been widely used in many scenarios after iterative updates of 4-bit, 8-bit, 16-bit, 32-bit, and even 64-bit MCUs. Currently, the market is dominated by 8-bit and 32-bit MCUs. In the future, the market size of 32-bit MCUs will further expand as the performance requirements of products continue to improve.
MCU Industry Chain
From the MCU industry chain, the original manufacturer is located in the midstream position, the upstream mainly includes raw material manufacturers, equipment manufacturers, etc. Fabless type requires additional support from foundry manufacturers compared to IDM type, and the downstream is dispersed to end applications through distributors, including automotive, industrial control, consumer, and communication fields.
MCU is widely used in various electronic products. China’s MCU industry downstream accounted for the highest percentage of consumer electronics, at 26%, followed by computer networks, accounting for 19%, the future with the penetration of new energy vehicles and the promotion of new forces in car-making will continue to pull the automotive MCU to enhance.
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Global MCU Industry Status
Global MCU market sales in 2020 were affected by the epidemic, sliding to $15.9 billion, down 2.45% year-on-year. global MCU sales rebounded to $19.6 billion in 2021, up 23.27% year-on-year, and are expected to exceed $20 billion in 2022.
Of the global MCU market sales in 2021, automotive MCU sales are $7.6 billion, or about 39%, with another 46% coming from general-purpose embedded application MCUs (including smartphones, computers and peripherals, industrial use and consumer products) and the rest from the smart card market (bank cards, transit cards, ID cards, etc.) and other uses, accounting for about 15%.
Total global MCU shipments will be approximately 30.9 billion units in 2021, up 12% year-over-year, with an estimated CAGR of 3.0% over the next five years, reaching 35.8 billion units in 2026.
MCU Industry Competitive Landscape
IDM and foundry MCU expansion is limited, and supply constraints are expected to continue. The specifications of automotive chips are mainly 8-inch wafers, and some manufacturers are beginning to migrate to 12-inch platforms. According to the MIC, automotive chip IDM manufacturing plant outsourcing proportion of about 15%, outsourcing products to MCU-based, of which about 70% of the part manufactured by TSMC foundry. In TSMC and major MCU manufacturers’ expansion plans, TSMC responded to the automotive chip supply gap by expanding and reallocating production capacity, while major IDM manufacturers’ expansion plans focused on 12-inch, with less 8-inch expansion.
MCU industry trends
The future of automotive MCU is one of the most promising markets.
Automotive electronics is undoubtedly still the next application of a hot spot, especially the development of new energy vehicles to this market has brought new opportunities. New energy vehicles can better adopt the new generation of electrical and electronic architecture because there are not too many old technology ties, and can directly apply domain controllers in new energy vehicles. The use of domain controllers will put new and higher demands on MCUs and also drive faster product iterations. Smart driving puts forward higher requirements for MCUs in terms of performance, such as users requiring MCUs to be able to perform more real-time calculations.
MCU is the most missing chip type in the current shortage of automotive chips. Compared to consumer and industrial-grade MCUs, automotive-grade MCUs have higher technical barriers to operating temperature, delivery yield, and operating life. Although the market is currently supplementing the supply of MCUs to some extent, control class chips are still the type in short supply.
The demand for integration, cross-domain convergence, in-vehicle central computer, and in-vehicle cloud computing will require more core processors, and the market share of 32-bit MCUs is expected to rise year by year, with the single value of automotive-grade MCUs growing exponentially.